5 Financial Aid Dos and Don'ts

Part of the private school selection process is financial aid. We point out five issues about which you should be aware.

DO Understand Why Some Private Schools Cost More Than Others

There are several factors which drive tuition costs. Location and facilities and type of school are three of the most important factors. Some schools cost more than others simply because of where they are located. Real estate prices vary widely throughout the United States as you well know. For example, it costs considerably less to rent space in Butte, Montana than in Los Angeles, California.

Insurance costs vary from locality to locality as well. Schools need comprehensive liability and property insurance. That's not an expense a prudent private school business manager will stint on.

The school facilities vary widely as well. A 12 classroom K-6 school located in the 10 year old education wing of a church or temple will cost less to run than a similar school housed in a 1930s mansion set on 30 private acres in the countryside.

Boarding schools generally cost more to operate than day schools. That's because they offer 24/7 supervision of your child as opposed to the 8 or 9 hours daily supervision a day school will offer.

Schools specializing in remediating learning differences and disabilities cost even more because they employ experienced, highly skilled and trained para-professionals and professionals who work with students closely, often on an individual or 1 to 1 basis. That drives the labor cost associated with this kind of teaching much higher than when a teacher has a class of 12-15 students.

DONT Delay Finding Out About Financial Aid

Financial aid can be very confusing for many parents. Think of financial aid as you would any credit application and you will quickly understand that applying for financial aid from a private school is really no different from applying for a loan. The school needs your whole financial picture in order to determine whether you are eligible for an award and if so, how much they will award you.

You wonder whether you make too much and have too many assets to be eligible. Private school financial aid committees look at all your assets and liabilities in order to make their decision. This short video explains what's involved.

Applying for financial aid at most private schools is a separate process from applying for admission to the school. You also need to make sure that you apply as early in the cycle as you can. Each school allocates a finite amount of money to the financial aid bucket. With tuition and fees at many day schools hovering in the $30,000 range and those at boarding schools topping $50,000, you can see how quickly a couple of full tuition awards will eat up a schools' financial aid budget. So, don't delay. Find out the answers to your questions. Submit the application. Know where you stand.

Several schools now offer a virtually free education if your family income is below a certain number. Exeter, Andover, Groton, St. Paul's and Deerfield all have financial aid programs which offer a tuition free education to admitted students whose income is below a certain threshold. The threshold varies but is in the $60-75k range.

Most schools have some form of a sliding scale of aid. You may think that you are ineligible for financial aid because your family income is more than $200,000. The truth is that you may indeed be eligible for some aid. It will depend on factors such as how many children you have at the school or in college as well as your life-style and many other factors. For example, if you have two children in boarding school and another at a private college, those kind of tuition expenses will be a major drag on most upper middle class incomes. Discuss your requirements with the school. It never hurts to ask.

Private schools recognize that they need to offer more aid to more families in these very tough financial times. Many more families who normally might be able to afford private school are asking for help. Schools have reallocated resources to make sure that they can meet the increased demand. Donors are helping with major gifts to their alma mater specifically earmarked for financial aid programs.

Financial aid can be a complicated proposition. You may even find it intrusive and embarrassing. The truth is that there is much more at stake, namely, your child's future. So, get your affairs in order. Gather all the required paperwork and forms. Submit everything as early as you possibly can.

DO Take Advantage of All the Options Available to You and Your Family

Some people can write a check for a year's tuition and never miss it. But with private school tuitions running into the $30's for day school and topping $50,000 for boarding school, the rest of us have to be creative. This video explains how to pay for private school tuition.

Here are some options for paying for a private school education.

Pay the fees in two installments.

Private schools generally render their bills in early summer and late fall for payment within 30 days. These invoices will include one half of the academic year's tuition charge as well as incidentals. Incidentals include fees for items such as as technology, sports, activities, laundry, and so on. Be sure to ask whether the school offers a cash discount.

Sign up with a tuition payment service and pay monthly installments.

The way these plans work is that you in effect are borrowing from them. You borrow one year's tuition fees and incidentals. Then you repay in equal installments, generally 10 installments. The plan in turn pays the school on the tuition due dates. This is a good payment option if you need to spread the payments over several months.

Note: not all schools accept all these plans. Each school makes its own arrangements with a specific tuition payment service. These firms offer private school tuition payment plans:

Just about every school offers some kind of financial aid. The important thing is to ask about financial aid. Don't assume that you are not eligible just because you are at a certain income level. Many factors are considered when awarding financial aid. Schools with more than 70% of their students on financial aid can be found here.

Phillips Exeter, Groton and St. Paul's are some of the top prep schools in the vanguard of offering a 'free' education to qualified applicants from families with less than $75,000 income. You will find more schools offering this kind of need- blind assistance although its availability depends on the financial resources of each individual school.

In addition, there are several schools around the country which are tuition free or virtually so by design:

Investigate other funding sources.

Many states and communities offer scholarships. Some employers offer assistance with tuition. Unions, brotherhoods and societies are also another source of education funding.

DONT Omit Any Information on Your Parents Financial Statement

Many private schools use the National Association of Independent Schools' Parents Financial Statement to help assess a family's financial needs. The Parents Financial Statement (or PFS) instructions and application can be found on the School and Student Services web site. School and Student Services is a subsidiary of the National Association of Independent Schools. It gives you access to over 2,000 schools which use this service to help them assess the financial needs of parents applying for financial aid. Here is another look at the financial aid process.

What is really helpful about SSS is that you only have to complete the application once. There is a one time fee of $35. And if you cannot afford the application fee, the fee can be waived by using the special fee waiver code which the school will give you.

The Parents Financial Statement Instruction Booklet walks you through each step of the process. Remember that you only complete the PFS if the school asks you to. After completing the application, you pay for it - currently a $35 fee - and submit your application. This will do two things: it sends your application to the schools which you have selected and it gives you an estimate of the kind of aid which you can expect to be offered. Now, you must realize that the SSS estimate is only that. Each individual school will determine the amount of financial aid you will receive based on the available pool of funds which each school has available. Actually the schools look at financial aid from the point of view of how much you can contribute towards the cost of your child's education. That is really what the PFS helps the schools determine in an objective manner.

DO Remember That Financial Aid Programs Vary from School to School

Each private school is unique. It sets its own academic agenda and manages its own finances. This is important for parents to understand because that same unique approach applies to financial aid. In other words what one school tells you it will award in financial aid will not be what another will offer. Their financial aid budgets are not identical. The demands on those financial aid budgets will be different. That's why it is so very important to ask each school how its financial aid program works. Assume nothing.

There are several ways to finance a private school education, learn more about your options here. We'll explore some of the most expensive schools, explain why tuition is rising and show you how it's all paid for.